The Retirement Series will explore attitudes towards retirement, how prepared Australians are for it and other insights from research gathered by AMP.

by Rod Finch

When you think about retiring, does your mind skip to budgets or the adventures you’re planning?

While one depends on the other – no money, no adventures, after all – it’s the fun stuff that tends to get people excited about growing old.

Recently, more than 13,500 people completed our online quiz designed to encourage people to start thinking about retirement in a fun and positive way. And the theme that struck a chord with more than 9,000 participants was freedom. As opposed to the other possible themes of family time, it’s a pipedream or it’s for old people.

"The theme that struck a chord with more than 9,000 participants was freedom"

Conversely, this idea of freedom, and more so financial freedom, was reflected in a separate AMP-commissioned study[1] where 51 per cent of respondents strongly agreed they want to be in control of their finances and 50 per cent said they want to live a happy and secure retirement.

The Australian Bureau of Statistic’s 2016-17 study on Retirement and Retirement Intentions[2] identified financial security as the main factor influencing people’s decision on when to retire (41 per cent of men and 34 per cent of women). This was followed by personal health or physical abilities (21 per cent for men and women) and reaching the eligibility age for an age (or service) pension (13% for both men and women).

There’s nothing particularly radical about these statistics. After all, given the choice, who would choose to enjoy a less than comfortable retirement. But consider that a 2014 study by the University of Melbourne and Willis Towers Watson[3] suggests that only 15 per cent of couples and five per cent of singles, aged between 40 and 64, are on track to enjoy a comfortable retirement[4] when only factoring in superannuation savings.

Thankfully, those figures increase substantially when other assets, investments and income are factored in (53 per cent of couples and 22 per cent of singles), though it’s still less than the 66 per cent of respondents to our quiz who linked retirement to freedom.

"It appears many Australians’ expectations for retirement are at odds with the reality they enjoy"

It appears many Australians’ expectations for retirement are at odds with the reality they enjoy. So, how do we help people’s expectations for retirement become their reality?

One way we’re helping people think about their financial future is to get them thinking less about the dollars and cents and more about what they intend to use it for; their goals. Then, taking it a step further, breaking those goals down into smaller, achievable, steps that will make a big difference later.